9. A company that uses a job order cost accounting system incurred $10,000 of fa

Question

9. A company that uses a job order cost accounting system incurred $10,000 of factory payroll during May. Prepare the May 31 entry assuming $8,000 is direct labor and $2,000 is indirect labor.

10. Plumley Ad Agency contracted with a company to prepare an ad campaign. Plumley uses a job order costing system. Plumley estimates that the job will take 145 designer hours at $90 per hour and 85 staff hours at $45 per hour. Plumley uses two overhead rates in applying overhead to jobs: Designer-related at $100 per designer hour and staff-related at $50 per staff hour. Determine the total estimated cost for this job.

Explanation / Answer

9.

Direct labor a/c Dr 8000

Indirect Labor a/c Dr 2000

To Cash a/c 10000

10.

Designer Cost = 145*90 = 13050

Staff cost = 85*45 = 3825

Overhead related to designer = 100*145 =14500

Overhead realted to staff = 50*85 =4250

the total estimated cost for this job = $35,625

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